After Tesla’s delays ramping up the Model 3 program we now see many posts stating that Tesla will not sell a $35000 Model 3 or raising doubts about it.
I think the naysayers should be ignored and these doubts should be set aside.
Tesla originally estimated that it would ramp up Model 3 production to 5000/week in December 2017 and then introduce the base $35000 Model 3 in early 2018, after production was ramped up.
That 5000/wk target has been delayed by six months to June 30 2018. So, not surprisingly, the standard battery Model 3 has also been delayed about six months — from “early 2018” to “late 2018” for owners at the front of the line. My Tesla account has had the “late ‘18” date for a “Base $35000” Model 3 for a couple months.
So it shouldn’t be any surprise that the base Model has been delayed until after Tesla has ramped up to 5K Model 3 per week. That was the plan all along.
Given all of the challenges Tesla has had with battery pack production, it would have been idiotic to start production of a second battery pack before they had ironed out production issues with the first one. Much better to streamline mass production of one battery pack first, and then apply those lessons to the second battery pack, especially since the smaller pack is at a lower price point.
But the natural delay to the base Model that has resulted from the delay of the entire program in no way suggests that Tesla has deviated from its plan to build the standard battery Model 3.
In fact, the more affordable Model 3 is essential to Tesla’s mission of “accelerating the advent of sustainable energy, so that we can imagine far into the future and life is still good.” Master Plan, Part Deux
The Model 3 is designed to give a “hardcore smackdown” to ICE even more than the new Roadster. To maximize the impact it is essential to offer a version that is as affordable as possible so that it can be a meaningful option to as many people as possible so that they are excited about making the transition from ICE to EVs.
Also, Tesla is targetting 25% gross margins on the entire Model 3 program. This eventually will include more expensive AWD and P models, as well as the least expensive versions. Tesla, like other manufacturers, doesn’t need a huge profit margin on a “stripper” for the program as a whole to be profitable. In any case, most people who order the standard battery Model 3 will want to order options like PUP or EAP or both.
But if people want to order a base Model 3, they will be able to, and it will be awesome. No doubt about it.
I think the naysayers should be ignored and these doubts should be set aside.
Tesla originally estimated that it would ramp up Model 3 production to 5000/week in December 2017 and then introduce the base $35000 Model 3 in early 2018, after production was ramped up.
That 5000/wk target has been delayed by six months to June 30 2018. So, not surprisingly, the standard battery Model 3 has also been delayed about six months — from “early 2018” to “late 2018” for owners at the front of the line. My Tesla account has had the “late ‘18” date for a “Base $35000” Model 3 for a couple months.
So it shouldn’t be any surprise that the base Model has been delayed until after Tesla has ramped up to 5K Model 3 per week. That was the plan all along.
Given all of the challenges Tesla has had with battery pack production, it would have been idiotic to start production of a second battery pack before they had ironed out production issues with the first one. Much better to streamline mass production of one battery pack first, and then apply those lessons to the second battery pack, especially since the smaller pack is at a lower price point.
But the natural delay to the base Model that has resulted from the delay of the entire program in no way suggests that Tesla has deviated from its plan to build the standard battery Model 3.
In fact, the more affordable Model 3 is essential to Tesla’s mission of “accelerating the advent of sustainable energy, so that we can imagine far into the future and life is still good.” Master Plan, Part Deux
The Model 3 is designed to give a “hardcore smackdown” to ICE even more than the new Roadster. To maximize the impact it is essential to offer a version that is as affordable as possible so that it can be a meaningful option to as many people as possible so that they are excited about making the transition from ICE to EVs.
Also, Tesla is targetting 25% gross margins on the entire Model 3 program. This eventually will include more expensive AWD and P models, as well as the least expensive versions. Tesla, like other manufacturers, doesn’t need a huge profit margin on a “stripper” for the program as a whole to be profitable. In any case, most people who order the standard battery Model 3 will want to order options like PUP or EAP or both.
But if people want to order a base Model 3, they will be able to, and it will be awesome. No doubt about it.
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